Wed 30th Sep 2015
Exporters can reap the rewards – but more companies must make the leap
Patsy McGlone MLA (Chair of ETI Committee); Sandra Scannell (Director at NI Chamber); Andrew McCormick (Permanent Secretary at DETI); Aaron Ennis (Corporate Banking at Danske Bank) and Martin Murdock (Finance Director at Norbrook Laboratories) pictured at the Danske Bank Export First event in Newry
“We must redouble our efforts to grow a pipeline of new exporting companies that the economy so desperately needs” says NI Chamber
Businesses who make the leap into international markets can reap rewards – that’s according to Ann McGregor, Chief Executive of the Northern Ireland Chamber of Commerce and Industry (NI Chamber) who was speaking following the latest ‘Danske Bank Export First’ event earlier today in Newry.
The event, which was hosted at the facilities of Norbrook Laboratories, was the latest event organised as part of the Danske Bank Export First programme, a business led support initiative by NI Chamber in partnership with Danske Bank. Also in attendance was the Chairperson of the Assembly Enterprise, Trade and Investment Committee, Patsy McGlone MLA who outlined the Committee’s current priorities in front of the audience of 50 businesses.
Citing recent research carried out by the British Chambers of Commerce (BCC) and NI Chamber, involving a survey of 2,467 businesses across the UK, Ms McGregor commented that despite stagnation in the Eurozone and the appreciation of sterling, the majority of current exporters (59%) have recorded a growth in sales over the past twelve months.
Furthermore, a third of exporters (34%) had to expand their production capacity last year to cope with demand from international markets, compared to only 3% that reduced capacity.
However, despite the rewards there remain serious challenges in how to get more ‘new exporters’ involved in trading internationally. The survey was dominated by long-established exporters (with 61% exporting for more than 10 years). Just 6% of businesses surveyed had recently started exporting (over the last two years).
Key findings from the survey:
More businesses need to start exporting
- The majority of the exporters (61%) surveyed have been trading internationally for more than 10 years, while new exporters (0-2 years) account for only 6% of the sample.
- 89% of businesses have ambitions to grow domestically, however fewer than half of firms (44%) have ambitions to grow internationally.
Exporters stand to reap the rewards as they tackle additional markets
- The majority of exporting firms (59%) reported an increase in sales in the past 12 months, compared to 18% who said sales have fallen.
- A third of exporters (34%) had to expand their production capacity last year to cope with demand from international markets.
Firms face challenges when trying to export
- The most influential factor when considering exporting is the ease of finding customers, agents and distributors, according to the majority of firms (77%).
- Increased funding (26%) and access to overseas agents and distributors (20%) are identified as key factors that would encourage non-exporting businesses to export for the first time.
- Almost six out of ten (59%) non-exporters say they do not have the right product or service for export.
Commenting on the findings, Ann McGregor, Chief Executive of NI Chamber said:
“Businesses willing to explore international markets can reap the rewards on offer and it is encouraging to see some businesses exporting for the first time. However with only 2% of Northern Ireland businesses currently exporting, we must redouble our efforts to grow the pipeline of new exporting companies that the economy so desperately needs and help more of our existing exporters to break into new markets. Together this will drive up our export performance and rebalance the economy.
“We must also make it easier for companies to consider trading internationally. By making exporting a bigger part of our business culture, we can build our collective appetite to trade. Addressing skills shortages and improving market access for potential exporters will go a long way towards removing the perceived barriers for non-exporters, many of whom could be selling their wares overseas.”
Patsy McGlone MLA, Chairperson of the Assembly Committee for Enterprise, Trade & Investment said:
“There is a tremendous opportunity, now and in the future, to grow and develop the economy right across the region by increasing exports. To achieve this, we must encourage those companies which are already exporting to explore opportunities to grow exports in existing markets, to seek out new markets and, importantly, to work towards developing new products and services through innovation.
“The real opportunity however, lies in the need for further investment to grow our indigenous business sector and by encouraging and supporting those companies that don’t yet export to find new external markets. The proposed devolution of corporation tax varying powers should greatly assist export growth, but it is important to stress that this must be supported by a fully integrated approach across government and between the public and business sectors.”
NI Chamber’s Danske Bank Export First programme, which is also supported by Etihad Airways, is a dynamic and unique scheme which equips local businesses with the knowledge and confidence to break into new markets for the first time or take their export activity to the next level. The programme which is now in its fourth year, has resulted in the delivery of 34 events and supported 875 companies to date.
Aaron Ennis, Corporate Banking Manager at Danske Bank, commented:
“The opportunities for local firms to grow their business and the wider economy through export are vast. At Danske Bank we are keen to do everything we can do equip Northern Ireland companies with the knowledge and skills that will enable them to seize these opportunities. We are privileged to be working closely with some of Northern Ireland’s most exciting exporting businesses, businesses of all sizes and from a wide range of sectors. And it’s not just about access to finance – businesses thinking about exporting need the right expertise and tools at their disposal to make it happen.”
Also present at the event was Liam Nagle, Managing Director at Norbrook Laboratories. Mr Nagle said:
“We are currently operational in up to 120 countries across the world at any one time. We see growth opportunities going forward in most geographies and sectors within our core marketplace. The veterinary pharmaceutical industry is growing at 5-6% and we hope to grow faster than the industry average. For example we expect to grow our North American operations ahead of market growth levels in the months and years ahead. Key export markets like the US are essential for a business such as Norbrook. We will also continue to invest in the large animal sector which is our historical strength but we are looking to accelerate growth in the companion animal sector on a global scale.”
NI Chamber’s ‘Growing Something Brilliant: An Action Plan to Grow the Northern Ireland Economy’ has recently provided the NI Executive with a number of proposed measures to assist first-time exporters, and to help existing exporters target new international markets:
Provide an easy to navigate and highly visible continuum of support for the business start, growth and export life cycle, particularly for potential/new exporters to include export finance.
- Ensure that the Export Strategy/Action Plan currently being developed for Northern Ireland puts business (not support organisations) at the centre of actions agreed and results in a streamlined, visible and effective service.
- Ensure any new EU settlement for Britain does not disadvantage Northern Ireland as a border economy. Members tell us they would like to remain in a reformed, more competitive, outward-looking EU.
- Increase the budget for export support to ensure that businesses build international capabilities and overcome barriers to entering new markets – leading to increased levels of export.
- Ensure that Northern Ireland businesses have easy access and affordable air connections to international markets.